MR. STANZEL: Good afternoon. We'll go ahead and get started here. Thank
you all for being here. We're joined today for this on-the-record
briefing, off-camera briefing by Secretary Mary Peters, Secretary of
Transportation; also experts here from DOT and FAA. We have FAA Acting
Vice President of Systems Operations Nancy Kalinowski and D.J. Gribbin, who
is the DOT General Counsel, who can answer questions, as well, about
regulatory process.

So with that I'll turn it over to the Secretary for a few comments and then
we'll take your questions.

SECRETARY PETERS: Thank you. Good afternoon, everyone.

Back in September, President Bush called for immediate actions to protect
consumers and to make air travel over the holidays more pleasant than it
was last summer. Today I briefed the President on new steps that we are
taking to improve the experience for people flying home for the holidays
and beyond.
We are determined not to let airline delays turn holiday cheer into runway
gloom.

Through the work of the Federal Aviation Administration and other agencies,
we have come up with some short-term measures that will add capacity to
handle holiday traffic. And as the President said, the FAA and the
Department of Defense have reached an agreement that will allow commercial
flights to take advantage of airspace typically used by the military. This
added capacity will be especially important to travelers flying up and down
the busy East Coast. Just as some urban areas open up the shoulders of
their highway to ease rush hour commutes, opening these holiday rush lanes
in the sky will give pilots additional options for flying around bad
weather and speed traffic from New York airports.

The FAA is also partnering with the Port Authority of New York and New
Jersey to take advantage of technologies and to make operational changes to
improve efficiency and to reduce delays. For example, we recently put in
place new runway procedures at Newark and JFK airports that will increase
the number of planes that can land under certain runway configurations and
certain weather conditions.

The President also spoke of the special preparations the FAA is making on
its own for the holiday crunch. Our air traffic managers will work with
controllers to make sure that air traffic facilities are well-staffed to
handle holiday flights. And Acting Administrator Sturgell has imposed a
moratorium on non-essential maintenance, construction and renovation
projects at FAA facilities around Thanksgiving and also around the
Christmas holidays so they will remain at full operating capacity and
efficiency when travel is at its peak.

And, as the President said, we are announcing a series of new -- proposed
new rules that will help passengers know what to expect when they book a
flight. They will allow us to step up oversight of chronically delayed
flights and enhance protections for consumers who are bumped, experience
delays or have other complaints against the airlines.

Our proposed rules require airlines to respond to complaints within 30
days, and to set up an audit of their consumer complaint process to ensure
that they are being responsive. We also proposed to double the
compensation for passengers who are bumped from their flights when airlines
over-book. This will go from $200 to $400 when the passenger can be booked
on a new flight in under two hours; and from $400 to $800 for longer
delays.

Our proposed rules further require carriers to adopt legally binding
contingency plans for lengthy tarmac delays, including guarantees of
adequate food, water, lavatory facilities, and medical attention. Nobody
looks forward to having their flight delayed or canceled, but these rules
will ease the uncertainty, it will smooth inconveniences, and it will give
travelers due compensation for their troubles.

Our preface, though, and our ultimate goal, is to eliminate the delays in
the first place. And we have zeroed in on a major choke point: the New
York region. And we're on target for reporting back to the President by
the end of the year on our proposed solutions. I remain optimistic that we
will find ways to use market mechanisms to preserve passenger choice while
reducing delays in the near term.

And we're all doing all we can to resolve our air congestion problems. But
also, as the President said this afternoon, to address our delay problems
we need legislation that would modernize our aviation system. We need
Congress to heed these words, and soon. Delivering a long-term solution to
the constrained capacity at our airports and in our airspace would be a
very wonderful holiday gift to the American people.

This administration is committed to finding the long-term solutions to
fixing our congested airline system, aviation system. In the meantime, the
new steps that the President announced today will help provide travelers
the relief from the holdup and delays.

Thank you so much, and we'll be pleased to answer your questions now.
Thank you.

Lisa.

Q Can you explain a little bit further about how this military airspace
is going to work? How many planes might it be able to accommodate? Don't
you still have to land those same planes at the airports with the runways?
So how will that help delays, ultimately, even if can get them there
faster?

SECRETARY PETERS: Well, Lisa, there's a couple problems. One is with the
takeoffs. Depending on where the plane is going, you could have more
traffic going into the same area, and that's the case when we don't have
these military routes. And I'm going to defer to Nancy to give us an
answer about how many more planes they may be able to accommodate. But
what it would do is move some of these planes off -- and Nancy, I think you
have a map that would show us this. In fact, why don't you jump in here.

MS. KALINOWSKI: We have a diagram for you, and we can give it to you on
email if you want it. But what we're talking about is the warning areas
that are off the coast of the East Coast of the United States. And this is
special-use airspace that is joint use; it is normally used by the military
all the time -- they're doing exercises out there. And we worked an
agreement with them to be able to release this airspace back to the
civilian market so that the civilian airlines can use this airspace during
the busy holiday season, during this Thanksgiving season. And what it does
is, is it does allow -- we were able to put a route through that airspace,
which essentially gets people out of the New York area quicker, especially
if we have weather up and down the East Coast.

Now, during the summertime when we have storms, we can work in a real-time
basis with the military in order to try to have access. But they use this
every day. So now they are essentially giving us a five-day block that we
can use the airspace and the airlines' can plan ahead.

Q But you still have that -- you still have sort of the choke points if
you are at the airport, you still have to land them -- I mean, you might be
able to get out of New York a little quicker, but on the other end you
still have the runway capacity you have, as far as landing the planes.

MS. KALINOWSKI: We believe it's going to be able to help us get out of New
York quicker for the holiday season.

Q Do you have any idea how many airplanes you'll be able to move -- I
mean, is there a number that you can quantify at all?

MS. KALINOWSKI: It's going to depend on the weather. No.

SECRETARY PETERS: And by the way, let me introduce who Nancy is, so you
know who she is. Nancy Kalinowski -- and we'll spell that for you later if
you need that -- she's the vice president of support operations, basically
the air traffic part of the organization. And I'm sorry, how many more
planes, Nancy?

MS. KALINOWSKI: We're not -- we haven't done those statistics, so we just
feel like we know how much traffic we're going to have for the holiday
season and we're just going to get them out of the New York area quicker,
especially --

SECRETARY PETERS: Yes, and let me explain --

Q -- just one airway or multiple airways or how does it --

MS. KALINOWSKI: It's two airways, essentially.

SECRETARY PETERS: And let me explain why we don't have advance numbers.
What we're making available in advance of this holiday period is the use of
this airspace, which hasn't happened in the past. As Nancy said, in the
past if an incident came up -- a summer thunderstorm or something like that
-- then we would negotiate with the military to see if we could use that
space. But this time, this holiday period we're going to allow flights to
plan in advance to use that space. It will be available Wednesday evening
--

MS. KALINOWSKI: Wednesday evening at 6:00 p.m.

SECRETARY PETERS: Six p.m. Wednesday evening.

Q Through Sunday?

MS. KALINOWSKI: Wednesday at 4:00 p.m.

SECRETARY PETERS: Through Sunday.

MS. KALINOWSKI: Through Sunday.

Q A quick follow up to what you just said. You said you were making,
effectively, two new airways available. How many exist now?

MS. KALINOWSKI: Well, there are no airways through that airspace now.

Q Right, right, I know. But what I'm saying is, if you're thinking of
it like a consumer does, how many lanes currently exist, and you're adding
two more?

MS. KALINOWSKI: We're essentially adding to a route which allows airplanes
to move up and down through that airspace.

SECRETARY PETERS: Nancy, absent opening these two new routes, how many
routes are available under the normal configuration?

MS. KALINOWSKI: Oh, we have hundreds of routes up and down the East Coat.
I mean --

Q So how much of a percentage increase in capacity is this?

MS. KALINOWSKI: It's not necessarily a capacity; it's more of an
efficiency. It's an ability to have an alternative if we have bad weather
on the East Coast. I mean, every day planes move up and down the East
Coast. They move over land, some of them move slightly off the coast, or
they use what we call the amber routes, which are outside of the warning
area airspace.

Q So if the weather was perfectly clear during the Thanksgiving period,
this actually wouldn't really help that much. It would really help only if
there was bad weather; it gives you additional routes to reroute planes?

MS. KALINOWSKI: It will especially help during the bad weather. But I
think many of the airlines are going to take advantage of these routes,
even if we have good weather up and down the East Coast.

Q Is this putting added burden on the guy in the air traffic control
center; new routes that he has to deal with that had been formerly just
military?

SECRETARY PETERS: No, sir, we've used these routes on occasion during bad
weather in the past, so the air traffic controllers are familiar with this.
And the other thing we're doing, as we announced earlier and the President
talked about, making sure that we have a sufficient number, and in fact are
well-staffed, and overtime available to all of our air traffic controllers,
so we have many more air traffic controllers on duty.

Q Is the government ready to do this at Christmas as well?

SECRETARY PETERS: We hope to be able to do it at Christmas as well.

Yes, sir.

Q Can you elaborate on the tarmac delay issue? When you have an
extraordinary tarmac delay, I didn't hear you mention any time frame, any
time limit on how long a full plane can sit on a tarmac.

SECRETARY PETERS: We haven't announced that yet, and in fact that will
part of the regulatory process that we go through. But one thing that
we're convinced of is we shouldn't have a one-size-fits-all approach to
this, because every airport is a little bit different, based on the amount
of apron space they have. What we want to do in working with the airports
through this process is to define plans for each airport.

But again, in this holiday period, they're going to have extra rolling
stairways. They're going to have extra gates so that they can move people
off the plane in the event that we get long ground delays. But these are
being fixed for every airport individually, as opposed to just, say, a flat
two hours or three hours for everyone.

Q I mean, how long would you say is a logical time for a planeload of
passengers to sit and wait?

SECRETARY PETERS: Well, part of the dilemma of that is, let's say
hypothetically that we're two hours. And if I'm second for takeoff and I
hit that two hours and I'm a passenger on that plane, I would likely rather
go ahead to my destination than get sent back to the gate. So that's why
we want to work with the airlines, the airports, and have a little
flexibility.

Q What are these binding -- I'm sorry -- what are these binding things
that you say the airlines are going to have to -- I'm a little bit fuzzy on
the details.

SECRETARY PETERS: Yes, basically, we're asking airlines to -- we're going
through a regulatory process on three things. Is that what you're
referring to?

Q Yes.

SECRETARY PETERS: Okay. One is the amount of compensation for involuntary
bumps. The second is to capture times --

Q I'm talking about the tarmac. You said that they had to have enough
food --

SECRETARY PETERS: Oh, I'm sorry; I did say that. Food, water, lavatory
facilities, and medical attention, if that is needed.

Yes, sir.

Q I want to go back to the airspace along the eastern seaboard again,
There are hundreds of north-south routes now, and you're adding two?

SECRETARY PETERS: We're adding two; two, sir. But two that aren't used at
all today. So think of it in the lady's other vernacular as an open lane,
if you will, on a highway.

Q Last winter, obviously, we had horrific delays, especially around the
Christmas holiday season. These military airways have been in existence
for years. Why are we only now looking at them as an option?

SECRETARY PETERS: Well, we're looking at them now as an option that we're
going to enable or set up before the holiday period arises. What's been
done in the past is if a bad weather sets in, then we get on the phone with
the military and negotiate the use of those routes. We're going to set
them up in advance of this holiday period, so that we know and, in fact,
can even schedule planes through that -- through those routes, which takes
the pressure off of some of the other routes.

Q And in JFK -- in JFK, are there any specific changes made there?
We've heard there may be some changes on the ground as far as runways and
for taking off and landing. No changes there yet?

SECRETARY PETERS: No, actually, there are operational improvements. For
example, I'm allowing two adjacent runways to be used concurrently, and let
me let Nancy -- if you want details

Q Yes, if we could have some details on that.

SECRETARY PETERS: Why don't we have Nancy get back to you, if I might,
after, and she can answer that in a great deal of detail, or --

Q Well, I would like that answered now.

Q Have her come up.

Q Nancy, how much of this is new? And have there been --

SECRETARY PETERS: Let me do the lead in for that, and then you answer the
specific question. We have been trying and implementing some of these
measures in advance of this holiday period, because you don't want to turn
everything on and find out it doesn't work on the eve of Thanksgiving. So
we've been implementing some of these. But the fact is that we have never
before put all of these together. The fact is that we have never had
access to these military routes before the onset of the holiday period and
before the onset of inclement weather to be able to do that.

The other thing we do -- and I'll ask Nancy to talk a little bit more about
this -- we did almost an hour conference call last week with all the
airlines and the airports; we asked each one of them what their plans were
for the upcoming holiday period -- sufficient staffing; sufficient
facilities, all of these things -- we're making sure that we're staffed up.
So we're really looking at this holiday period in a much more
comprehensive way than we have in the past to make sure that we're
prepared.

Now, if we get an ice storm up and down the eastern seaboard, I'm going to
tell you, it probably won't be pretty. But we're going to take every
precaution we can to make sure that we can handle passengers and handle
them well.

Nancy, why don't you take the specific question about operational
equipment?

MS. KALINOWSKI: We've been working on new procedures, new routes, new
designs. As you all know, we announced the New York airspace redesign on
September 5th, and we started the implementation and the planning for the
next five years for that implementation. As part of that, we're going to
be building (inaudible), or area navigation routes, GPS routes, that are
routes in and out of the New York area, and we're also going to have area
navigation departure procedures and arrival procedures into the airport.

Those are under development. We have put several of them in, in the last
12 months, that are overlays over current conventional routes, and we're
going to be designing -- we have designs for new ones that will take about
two years to put into that airspace. Some of them will be delivered next
spring. Some of them will be delivered next fall. What we were talking
about specifically at JFK were the procedures for arrivals to the 31-left
and the 32-right. This summer we worked with the air traffic control
community and did training and worked on a new procedure that would allow
us to have standard approaches to both of those runways when we have an
arrival push that can help us during a bad weather scenario, difficult
weather scenario.

Q (Inaudible.)

Q Are those in place, then?

MS. KALINOWSKI: They're in place. They were just put in, in September.
So we're using them now.

Q The standard approach, how is that different from what you used to do?

MS. KALINOWSKI: Before we would have an ILS approach -- instrument landing
system -- approach to the right runway, and then we would do a visual
approach, which allowed us to do that in good weather. It was more of a
challenge in bad weather. Now we've actually established the procedure,
the pilots all know about it and the air traffic controllers are trained,
as well, to do a staggered approach. So we are still using an instrument
approach in, but they're staggered so that you have the required
separation.

Q So just to be clear, in poor visibility you're only able on the 31s to
do one runway at a -- use one runway for arrival.

MS. KALINOWSKI: Previously it was one for arrivals, one for departures.
And so now we've increased the capacity and you have a capacity cushion,
that's four to six more airplanes per hour arriving.

Q So that it will be simultaneous, but staggered?

MS. KALINOWSKI: Simultaneous, but staggered, so that you have the required
separation.

Q (Inaudible).

Q And flight controllers are on board? This does not put a dramatic
increase on their workload?

MS. KALINOWSKI: No, they were trained and they've been working it well
since September.

Q Could you give us an update on your investigations into market
mechanisms like congestion pricing?

SECRETARY PETERS: Certainly. We're proceeding with two efforts to look at
more long-term solutions concurrently. One is an aviation rule-making
committee, that involves a number of stakeholders -- airlines, airports,
other stakeholders that are involved in that. And then concurrent with
that we're doing a scheduling meeting.

As part of the scheduling meeting we have determined -- at lease in our
initial count -- that we could, instead of the hundred-plus flights that
took off per hour during peak period last summer from JFK, we've determined
that that number should be more around 80, 81. We're currently in
negotiations with the airlines, with Port Authority, to determine what,
ultimately, that number will be.

But what I want to do, and what I keep asking our folks to look at is look
at market mechanisms. If we can price those take-offs and landings, price
the use of that airspace so that we spread the demand out over a different
period of time -- perhaps take some of the peak (inaudible) flights out and
put them either before or after, we can manage significantly more
efficiently. Those of you who live in the Washington, D.C. area -- think
August in Washington. Think how much better surface traffic is in
Washington here in the month of August. And why is that? Because about 5
percent of the people -- and it only takes that -- about 5 percent of the
people are gone and the roadways run more smoothly. That same phenomena
can occur in the skies if we can price some people out of the peak periods.

So we're continuing those discussions and hope to have results -- will have
results to the President by the end of the month.

Q What if the military needs that space sometime between Wednesday at
4:00 p.m. and Sunday at midnight, number one? And number two, why haven't
you done this before?

SECRETARY PETERS: If they need that space, they have it. Military,
security --

Q (Inaudible).

SECRETARY PETERS: Well, we just have the controllers pull the planes off
of those routes, which they can do. So that if the military or security
needs that space, they have that space.

Again, what hasn't been done in the past -- and since I wasn't here in the
past, I can't necessarily speak to that always -- but to pre-negotiate this
in advance of the holiday period is what's new this time and what will
allow us to schedule operations on those flight lanes, instead of using
them in the event of an inclement weather or an emergency.

MS. KALINOWSKI: Absolutely true. And I want to make one clarification.
We have those routes at 24,000 and above, which is what the airlines need
-- that's the altitudes that they're going to be flying at. And you still
have all the military security flights taking place below that, it's just
that they're not having to use it for the training purposes -- which is why
they use it all the time, all during the week.

I wanted to make a clarification. You asked the question about the routes,
and at that time I said there were hundreds of routes. Basically, I was
thinking about the entire country. Basically you've only got about a dozen
generally used routes up and down the East Coast. So my apologies to you
all for -- so this extra route off the coast really does make a significant
difference in terms of our capacity to handle the traffic up and down the
East Coast.

Q A clarification, because you didn't get to finish on JFK earlier. I
think Lisa and I were wondering, anything new in regards to some take-off
procedures? I thought we had heard there might be something new there?
(Inaudible) -- September -- (inaudible) -- it wasn't an runway where you
had to kind of hang a quick right or you get into LaGuardia airspace,
something like that, opened for take-offs?

Q Thirty-one right.

Q Thirty-one right is a right-hand turn.

Q That's new as well, though, isn't it?

MS. KALINOWSKI: We're working that now.

Q When does that start?

MS. KALINOWSKI: It's in a testing phase right now. I mean, we're in a
testing phase. That's something we're going to be working toward
implementing. So we're trying to upgrade -- we're trying to address a lot
of different issues and a lot of different procedures in the area.

Q But I guess in layman's terms, these two measures, what they do --
they get planes more quickly on the ground and then more quickly off the
ground at JFK, but the second one is only in testing.

MS. KALINOWSKI: We do a right turn off the runway, but it is limited to a
certain number of aircraft. There is only a certain configuration; some of
the larger aircraft can't do it. But we are doing the right turn off of
31-right.

Q And are you testing --

SECRETARY PETERS: I'm going to go to the lady in the back here who's been
patiently waiting.

Q While I understand that air traffic congestion needs to be addressed,
what about perhaps the greater danger of chemical and liquid products being
able to get through airport security and being brought on board a plane?

SECRETARY PETERS: That's actually something that TSA manages, as opposed
to us. We certainly are going to have more people on the ground, in the
airports -- all of us -- to make sure that we handle things. And that's an
important question, because travelers around the Thanksgiving holiday
period aren't necessarily the hardened road warriors that are out there
every day using this system. We're going to have families, we're going to
have children, we're going to have people bringing baby formula and other
things on board -- elderly, students -- a lot of people who aren't
acclimated to flying as much as a road warrior is.

And that's why FAA has established this website to get a lot of good
information out there. The Air Transport Association is, as well, to make
sure everyone knows about the liquids that you can bring, what you can't
bring, whether you can bring that baby formula or that breast milk on. All
of those questions will be answered in advance for people so they don't get
to the airport and find a surprise.

Q But if someone has those on their body, and it's not able to be
detected by the scanners that people walk through, there's a very real and
imminent danger, God forbid, of someone being able to blow up an aircraft.

SECRETARY PETERS: Ma'am, I'll need to refer you to TSA. I know Kip Hawley
at TSA would be able to answer that question.

Q Can we talk about the western United States a little bit? You've
talked a lot about the congestion on the East Coast. There's plenty of
flight delays at places like LAX, Phoenix, Seattle. What is this going to
do for West Coast travelers?

SECRETARY PETERS: Here's why we're starting in the New York region. I
mean, this is the sore point of all of this. What we have in the New York
area right now, 40 percent overall delays and cancellations; nationwide
that's 30 percent. But the other important factor is that three-quarters
of the flight delays are because the plane went into, out of or through the
New York airspace -- three-quarters of the delays nationally. So that's
why we're starting in the New York airspace, and working with the airports
-- first JFK, but working with the airports in that area.

If we can solve this here -- it's kind of like the old song; if you can
solve it here, you can solve it anywhere -- we think we can. But we will
migrate these plans out to other places. But I want to emphasize, we're
looking at sustainable solutions. We're not looking at something that will
just work until we take caps off or something else. We want sustainable
solutions, because the amount of demand that we have for air traffic
services is a sign of a very strong economy. Lots of people are flying;
lots of people can afford to fly. That's great. We don't want to
constrain demand. So we're working here first.

Q This holiday season, though, will West Coast travelers, flying from
L.A. to San Francisco, will they see any improvement --

SECRETARY PETERS: Oh, ma'am, absolutely. These steps that we're taking,
both our agency, the airlines and the airports, this is nationally.
Conference call we did last week, we didn't just talk about the New York
airspace. We talked about nationally, so we're staffing up, making sure
that we have everything in place to prevent delays to the greatest extent
we can -- this is happening throughout the United States, so it isn't just
in this area.

I think we have one last question.

Q Yes, Secretary Peters, you mentioned Newark. What are the procedures
changed there --

SECRETARY PETERS: I don't know. I'm going to ask Nancy about any
different procedures at Newark.

MS. KALINOWSKI: One thing that we're looking toward as far the national
airspace redesign is dispersal headings -- the southern departures off of
Newark. And we're going to be dispersing them -- instead of playing follow
the leader just down the river, they're going to be able to disperse to the
right during our busiest push times.

Q And that will be in effective immediately?

MS. KALINOWSKI: Oh, no, that is not in effect immediately. That is
something that will be coming shortly.

Q One last question. You got interrupted as you were listing what
immediate rule-making authority -- could you address that, and could you
speak to how long that might take?

SECRETARY PETERS: The first of those is the compensation for bumped
passengers. And I said we're moving from what we anticipated doing, back
when we talked last in September to a specific proposal right now, which I
believe is $400 under two-hour delay and $800 if it's an over two-hour or
longer delay. That would be the mandatory amount of compensation, which is
significantly more than it is today.

The others are to require the airlines to provide more data to us. You
know, for example right now, and some of you noticed this, when you push
back from the gate, you're not necessarily counting how much hold time you
have on the ground or tarmac delays. We want to start capturing that data
so that we know where the specific problems are so that we can deal with
the problems.

And the last is the airlines to have plans, have contingency plans, so in
the event that they get an ice storm or some other problem, what are they
going to do? And it really goes to what the gentleman over here asked
about. We believe that the best way to deal with this is have the airlines
propose very comprehensive plans to us and not have a one-size-fits-all
that may work in Newark but may not work in Atlanta or somewhere else.

Q How long do you anticipate -- how long is the rule-making --

SECRETARY PETERS: The first of those rule-makings will be complete by mid
year, by the mid-summer, late summer of this year. That would be the
compensation. The other two are going to take a bit longer. But we also
are working with the Inspector General's report that I spoke to you all
about earlier. He did a very comprehensive investigation, gave me results.
I've asked D.J. Gribbin, our General Counsel, to work to start
implementing those recommendations in advance even of those rule-makings.

Q If you get this bump in compensation, and you go to congestion
pricing, won't the airlines pass these new costs on to their ticket buyers?

SECRETARY PETERS: They will pass some costs on, but the fact is, the
customers are paying the price today with lack of reliability, lack of
predictability, lack of knowing if they can get there on time.

You know, when I worked in the private sector before I came to this
position, people in my company traveled the day before always, because we
couldn't count on getting there the same day. That was an enormous price.
But the other thing is, as we open up additional capacity, through
congestion pricing, prices will even off, we'll see a leveling, so we don't
see a long-term increase in prices.

Q If this works does that mean the 4th of July, Labor Day, Memorial Day,
those holidays -- this likely rule --

SECRETARY PETERS: By next summer, by summer of '08, we want some of these
longer-term solutions in effect so it will work us through the entire
summer. But certainly when we see peak periods of travel, we're going to
respond to that.

MR. STANZEL: We do have -- thank you all -- we do have, on whitehouse.gov,
a fact sheet about this, the President's remarks, the transcript from this
briefing, as well as you can go to fly.faa.gov to get more information
about your travels.